Soilbuild REIT posts 3Q DPU decline by 9.4% to 1.245 cents

SINGAPORE (Oct 17): Soilbuild REIT announced that its 3Q18 distribution per unit (CPU) has dropped 9.4% to 1.245 cents, compared to 1.374 cents in 3Q17.

Income attributable to shareholders for the quarter was 8.6% lower at $13.2 million from $14.4 million last year.

This brings 9M18 DPU to 3.833 cents, 11.5% lower than 4.329 cents in 9M17.

Gross revenue for 3Q18 was 3.6% lower at $19.8 million, compared to $20.5 million in the same period a year ago. The decrease in revenue was largely attributed to the divestment of KTL Offshore, which resulted in $1.0 million lower revenue, as well as lower contributions from West Park BizCentral and Eightrium amounting to $0.9 million and $0.4 million respectively.

This was partially offset by higher revenue from Solaris, which was converted into a multi-tenanted property on Aug 15.

As property operating expenses increased by 30.3% y-o-y to $3.58 million, 3Q18 net property income came in at $16.2 million, 8.8% lower than $17.8 million in the previous year.

During the quarter, the REIT’s manage had successfully completed more than 110,000 sq ft of renewals, forward renewals and new leases. Meanwhile, new take-up has boosted the occupancy of Eightrium by 0.8 percentage points to 89.3% whereas non-renewals resulted in a 2.3 percentage point dip in occupancy at Tuas Connection.

As at Sept 30, the REIT’s cash and cash equivalents stood at $75.3 million.

Roy Teo, CEO of the manager says, “We are pleased with our maiden foray into the Australia real estate market. The DPU accretive Australia acquisitions and the recent conversion of Solaris to a multi-tenanted building are expected to strengthen and provide further stability to Soilbuild REIT’s DPU. In the near term, industrial rents and occupancy rate still face headwinds amid a supply influx in recent years.”

Units in Soilbuild REIT closed 1 cent higher at 58 cents on Wednesday.